California’s ambitious push to solve its housing crisis is running headfirst into a familiar obstacle: getting shovels in the ground. New state data show that across nearly every corner of the state — including the entirety of Southern California — cities and counties are falling far short of the housing production targets regulators set for them, raising fresh doubts about whether the state’s planning process can actually deliver the homes it promises.
Every eight years, the California Department of Housing and Community Development hands local governments a homework assignment few of them relish: draft a plan showing how they’ll accommodate a state-assigned share of new housing across four income categories, from housing for the wealthiest buyers down to units affordable to the poorest residents. Those targets are meant to reflect how much housing each region needs to keep pace with population growth and chip away at a shortage of affordable homes that has plagued California for decades.
This summer marked the halfway point in the current eight-year cycle, giving officials, developers and housing advocates their first real chance to check the state’s progress against a report card. The results were not encouraging.
Fewer than a third of California’s cities and counties are on pace to permit enough “above moderate” housing — generally market-rate homes — to hit their targets by the end of the cycle, according to data local governments reported to the state. The numbers get worse from there. Only about 10% are keeping pace on moderate-income housing. About 13% are on track for low-income units. And a mere 6% of jurisdictions statewide — just 32 out of more than 500 — are on pace to meet their targets for housing affordable to very low-income households, generally defined as those earning less than half the local median income.
Only five jurisdictions in the entire state are permitting housing fast enough to stay on track across all four income categories. Four are sparsely populated, unincorporated areas of rural counties — Plumas, Napa, Yolo and Mono. The fifth is Placerville, a Sierra foothill town of roughly 11,000 residents east of Sacramento.
Southern California, unsurprisingly, is not faring any better. Of the 212 cities and counties in the region that had passed the halfway mark in their planning cycle this year, all but four had missed at least one of their housing benchmarks — and are now subject to a state law meant to punish underperforming jurisdictions by fast-tracking development approvals.
Take Irvine, in Orange County, as a case study in how uneven the progress can be. State regulators told the city to plan for 8,671 market-rate homes by 2030. Halfway through that timeline, Irvine has already issued permits for more than 6,000 units — putting it on pace to hit that particular goal, a rare accomplishment among California cities.
But when it comes to housing that ordinary residents can actually afford, Irvine looks a lot like the rest of the state: badly behind. The city has permitted only about 9% of the very low-income units it needs to reach its 2030 target, and just 3% of the housing aimed at households earning up to 80% of the area’s median income.
**Why isn’t more housing getting built?**
For anyone who has tracked California’s homebuilding trends over the past half-century, the gap between what’s planned and what’s actually built is nothing new. The state’s current housing target totals nearly 2.5 million units over eight years — itself a scaled-back version of the 3.5-million-unit goal Gov. Gavin Newsom campaigned on in 2017. Hitting 2.5 million would require building roughly 312,500 homes a year, a pace California has never sustained, not even during its biggest housing booms in the early 1960s and mid-1980s.
Despite a wave of state legislative and policy changes meant to jumpstart construction, California’s annual homebuilding total this decade has hovered only slightly above 100,000 units — nowhere close to what’s needed.
Critics of the state’s planning process argue the targets themselves are unrealistic, and that local governments have limited power to force anything to actually get built.
“Cities can’t compel developers to build, and cities themselves don’t build housing,” said Jason Rhine, a lobbyist with the League of California Cities. Local officials, he noted, can rezone land and clear regulatory hurdles, but they can’t make a developer break ground.
Housing advocates counter that the sluggish production numbers are proof cities aren’t doing enough to make development attractive in the first place.
“Cities may say they don’t control production directly, but they do control fees, zoning and permitting,” said Laura Foote, executive director of YIMBY Action. The entire state housing-allocation process, she said, “only works if there’s the political will to hold cities accountable.”
Foote also faulted state housing regulators for not pushing harder to force cities to adopt more development-friendly policies.
In a written statement, HCD spokesperson Jennifer Hanson said the department is “actively monitoring and enforcing” the commitments jurisdictions made in their state-approved housing plans. She pointed to two recent state laws — one exempting many urban infill housing projects from environmental lawsuits, and another requiring cities to allow taller buildings near major transit stops — that have already helped “advance approved projects representing thousands of proposed homes.”
Hanson also noted that plenty of factors driving whether a project gets built are entirely out of local or state control. “Whether a project moves forward depends on interest rates, construction and land costs, access to capital, insurance, and expected rents or sale prices,” she said.
**A limited safety valve**
Affordable housing faces an added hurdle: a lack of public money. With few exceptions, building homes affordable to below-median-income Californians requires public subsidies, philanthropic capital or lenders and investors willing to accept lower returns. State support for that kind of financing has dried up since funds from a 2018 voter-approved housing bond ran out, which helps explain why affordable housing production numbers remain so low.
Affordable housing developers and advocates are hoping voters will approve an $11.25 billion state bond measure this November to refill that funding pipeline.
Middle-income housing faces its own unique financial squeeze — often ineligible for subsidy programs that prioritize the lowest-income households, yet not lucrative enough to attract developers looking to turn a profit without public help.
The state does have one tool to punish jurisdictions that fall behind. A 2017 law requires cities and counties that miss the halfway mark on their above-moderate, moderate or very-low-income housing targets (affordable “moderate” income housing is excluded) to fast-track approval for most apartment and condo projects. In exchange, developers must set aside a share of affordable units and pay higher wages to construction workers.
But history suggests that alone won’t be enough to spark a building boom. Developers have long argued that the law’s affordability and wage requirements make many projects financially unworkable outside of the state’s highest-rent neighborhoods. Since 2018, the law has been used to approve roughly 28,000 homes statewide, according to state housing officials — a meaningful number, but nowhere near enough to close the gap between what California is building and what it actually needs.
Original source: CalMatters
